July 2023
• Quasi Georgism Redux. It seems to be a national plague. People who have been receiving rent free use of rental properties are claiming they’re being treated unjustly as their presumed landlords are going broke by allowing them to stay, with nobody offering to pick up their tab for taxes, utilities or anything else. This was the fundamental problem in Henry George’s scheme. He declared that people should get free use of the land and the landlord pay what would have been received as rent to the government as a single tax. The problem, of course, is that if landlords are paying out money and taking nothing in, there’s no reason to remain an owner. Just walk away or sign it over to the government . . . and then there would be zero tax revenue. Or they could pass the Economic Democracy Act, but nobody seems to be thinking of that.
• Yellen in a China Shop. Evidently under the impression that the United States desperately needs to have the Peoples Republic of China lying, cheating, and stealing from America, Janet Yellen is making a frantic and humble trip to impress the Chinese with our sincerity and gullibility. Somehow it has never occurred to the economic and political powers-that-be that the citizens of the United States should be the primary beneficiaries of the American economy, since they are the ones presumably creating and living in it. Of course, Keynesian economics is built on the fundamental assumption that you have to hold other countries’ debt and they have to hold yours or we’d be stuck with an asset-backed reserve currency that the politicians couldn’t control. They haven’t yet realized that we wouldn’t need China if we had the Economic Democracy Act.
• Crypto Collapses (Again). There has been another collapse of the crypto currency bubble, which is what we should expect of something that has no existence apart from the human minds that create it and no backing or official sanction. Of course, it also means that a lot of job dependent on the crypto market have taken a nose dive. One way to avoid this, of course, would be the monetary reforms embodied in the Economic Democracy Act, but nobody seems to be thinking of that.
• Keynesian Consumerism. Most people don’t realize it but what saved Keynesian economics — in the short term — was the invention of widespread consumer credit via credit cards. The “Diner’s Club” in the early 1960s, the first widespread consumer credit card, was a godsend to Keynesian economics, as it permitted consumers to spend far beyond their means . . . which is the heart of Keynesian economics, which shifts purchasing power from the poor to the rich via “forced savings” of higher prices paid for fewer goods and services. Unfortunately, just as governments can’t keep spending forever without repaying their debts, neither can individual consumers consume without producing something — Say’s Law of Markets, which Keynes sneered at as he rejected the idea that people should be productive and do something meaningful with their lives. Now it looks as if the bill may be coming due, and the experts are, of course, completely baffled. They don’t seem to be aware that the way to get out of debt is not to inflate the price level even more, but for ordinary people to become productive, as would be the case with the Economic Democracy Act.
•Reparations in Evanston. The city of Evanston, Illinois, has announced an expansion of its reparations for slavery program. This is interesting, as the state of Illinois was not known to be a slave state. On closer examination, what qualified people are being paid is compensation for the effects of slavery, not slavery itself, which would seem harder to quantify if not identify. The program has been expanded from housing vouchers, as Gene Gordon of the Descendants of American Slaves for Economic and Social Justice put it, for housing that they can’t afford without the vouchers, to cash payments as well, paid for out of the city’s legalized cannabis sales. It was difficult to say whether Evanston’s program is intended to operate in perpetuity or for the ten years mentioned in the article, but one thing is clear. Nothing is being done truly to repair the sytem that caused the problem in the first place. All that is being done is getting some people hooked on what amounts to a bribe being paid for by other people who cn legitimately say they never owned slaves, so why should they have to pay for it? Of course, as Gordon says, if they truly wanted reparations, they’d adopt with the Economic Democracy Act, which would repair the system for the benefit of all, not just hand out hush money to a few privileged souls.
• Golden Gate Debased. Earthquake and fire couldn’t destroy San Francisco, but human knavish imbecility can as the City on the Bay goes into free fall. Of course, it’s being blamed on everything except what is probably the real cause: the near-total powerlessness of ordinary people. This in turn is caused by a condition of dependency enforced by reliance on the government or a private employer in which the worker has no ownership stake. The situation is consistent with the warning issued by Benjamin Watkins Leigh of Virginia in 1820 that power and property can be separated for a time, but never divorced, for as soon as the pangs of separation are felt, property will take over power or power will take over property. When the majority of people have neither power nor property, what you get is the situation that prevails today in San Francisco. Is there a solution? Yes. Adopt the Economic Democracy Act. . . .or see the City on the Bay sink into complete chaos.
• Dumbest Headline EVER Department. According to this news story, inflation is plummeting, but prices are soaring! Say, what? Inflation means a rise in the price level! Only an expert could say something so insanely dumb. Of course, adopting the Economic Democracy Act would straighten out a lot of this weird thinking.
• Chinese Ghost Cities Redux. The Chinese “ghost city” phenomenon appears to be falling apart of its own dead weight. Farmers are moving into the abandoned cities and grazing livestock and doing other things amidst the decaying ruins of China’s economy. Of course, if they had enacted the Economic Democracy Act they would have known that the “Ghost Cities” as well as much of the “Belt and Road Initiative” was a colossal waste of resources . . . and explains why the Chinese government is so anxious to suck in as much of the rest of the world as they can to bolster what is left of their economy. Too bad the experts told them differently
• The Open Hidden Inflation. There is inflation: of stock prices and other things not counted, and the recession is in full swing as the obsession with the stock market hides it. As this news story has it, “The U.S. economy has proven more resilient than many expected amid an aggressive series of interest rate hikes at the Federal Reserve that are intended to fight price increases by slowing the economy and slashing demand, analysts said.” See below for what’s been happening in response to the fantasy that “interest” represents the “price” of money which goes along with the fallacy that money and credit are a commodity. The only way out of this is a realistic view of money as can be found in the Economic Democracy Act.
• The Greatest Money Myth? Possibly the most damaging money myth is that idea that money and credit are a commodity and therefore must pre-exist any economic transaction. Inflation and deflation therefore change from effects to causes and the experts start to talk about inducing inflation or deflation to achieve desired results rather than getting down to economic brass tacks and looking at how people produce, distribute and consume. Understanding money as a measure of value instead of an essential precondition for carrying out economic transactions would put all this financial foolishness into the dustbin of history, and the way to do that would be to adopt the Economic Democracy Act.
• Economists Mostly Dead Wrong. We realize that this “News from the Network” shtick is supposed to be news, but we couldn’t resist taking note of a dog bites man story that informed us that the economists were mostly “dead wrong” about economics. What else could you say about a profession that ignores the claims of binary economics and refuses to consider the claims of the Economic Democracy Act?
• Full Employment Recession? Now we have officially seen everything: the experts are talking about the possibility of (are you ready for this? No, you’re not) a “Full Employment Recession”!?!?!?!?!? They say it’s “rare.” Actually, if Keynesian economics was in any measure a reflection of reality, it would be impossible. It would, of course, be completely unthinkable in binary economics and the Economic Democracy Act, but we’re talking Keynesian economics here, not reality. No, we have no idea what a “Full Employment Recession” is, either.
August 2023
• Anchor’s Away? Let’s hope not. Anchor, America’s oldest “craft brewer,” is closing down but there may be a way to save it if the employees who want to buy it get their way. Other craft brewers have gone ESOP, so it makes sense that Anchor, the first and the leader, should, especially if they do a JBM S-Corp ESOP and avoid all corporate income taxes. Of course, under the Economic Democracy Act, all companies could legitimately avoid corporate income taxes and the economy would receive a big boost.
• A Necessary Recession? According to J.P. Morgan, a recession is necessary to get the economy back on track. We beg to differ. A recession is never necessary. Of course, neither is inflation nor deflation. Getting the hint? All of these, at least when they result from money manipulation, can be eliminated completely from the economy by adopting the Economic Democracy Act?
• Modern Financial Logic. Virtually all modern monetary and fiscal policy is based on something called “the Currency Principle.” Simplified, the Currency Principle is that the amount of money in the system determines the level of economic activity. Unfortunately for the experts, it is the Banking Principle that reflects reality: that the level of economic activity determines the amount of money. The Currency Principle is thus exactly the reverse of reality. It should come as no surprise, then, that the Federal Reserve thinks it can lower prices by raising prices! Of course, all of this nonsense would be seen for what it is if the monetary and tax reforms of the Economic Democracy Act were adopted.
• Tightening Loan Standards. Consistent with the rise in interest rates, banks are starting to be more selective in the loans they make. Under the Economic Democracy Act, all loans should be properly scrutinized because if made out of past savings, the lender is risking other people’s money, while if made out of future savings, the lender is risking its own creditworthiness. It’s understandable, of course, but it’s what lenders should have been doing all along, and that they would do at all times under a sound financial system.
• U.S. Banks Downgraded. One of the reasons for having a central bank, the original reason, in fact, was to ensure that member commercial/mercantile banks always have adequate reserves and access to liquidity so that they avoid getting into a credit or liquidity crunch and will always be able to stay solvent. With governments taking over central banking to fund operations, the private sector is left high and dry, with the result that commercial banks are getting into trouble making bad loans and not having adequate reserves. Of course, if bankers really understood banking, this situation probably would not have come about, but it is nevertheless relatively easy to fix. Adopting the Economic Democracy Act, would put the monetary and financial system back on a sound footing.
• Hyperinflation? Not Yet, “But”. People who don’t understand money are constantly raising fears of hyperinflation, evidently unaware that if some government would adopt the Economic Democracy Act, there would be very little danger of hyperinflation, regular demand-pull inflation, or even the dreaded (to speculators, politicians, and academics) deflation.
• Delusional Economics. Don’t worry. According to economist Paul Krugman, the U.S. economy is assuming debt at too great a rate for there to be a debt crisis! In other words, don’t worry about paying down existing debt, just assume more and more, because the more in debt we are, the richer we are!! Woo-Hoo!! If you’re suffering from obesity, EAT MORE!! If you’re an alcoholic, have another drink!! If you’re a gambler, double down!! Don’t worry, for as John Maynard Keynes said, in the long run, we’re all dead, so there’s nothing to worry about . . . except for sticking the next generation with an even greater mountain of debt. Of course, the whole problem could be solved by adopting the Economic Democracy Act, but where’s the fun in that?
• Reserve Currency Woes. In classic banking theory, a reserve currency is supposed to be THE standard measure of value for an economy and into which all other forms of money can be converted on demand. This presumably ensures stability in the money supply as well as uniformity and public confidence, without which it would be difficult to carry out transactions. It’s also a very bad thing when a reserve currency fluctuates in value or is used by a government for political ends. It’s a little like manipulating feet and pounds to force through a political agenda. In any event, Janet Yellen is once again proving she doesn’t understand money, credit, banking, and finance by taking for granted that the U.S. dollar should fluctuate in value, not merely that it does as a problem to be solved. Of course, all the manipulation would be completely unnecessary if we adopted the Economic Democracy Act, but then the powers-that-be would not be able to control the rest of us as easily as they do now, or at all, for that matter . . . and that scares them to death.
• U.S. Dollar’s Reserve Status Threatened. Bank reserves are defined as vault cash and commercial bank demand deposits at the central bank — the Federal Reserve. The idea is to have enough cash on hand — or the ability to issue a check drawn on the Federal Reserve, which is legally the same as cash — to prevent a run on the bank that could cause the bank to shut down permanently and the depositors lose all their money. With a properly run central bank and modern communications, it should be impossible for a bank to go under, even if it has made nothing but bad loans, for the Federal Reserve can instantly loan the bank money from all the other banks that are members. That, however, assumes that the reserve currency being used is uniform, elastic . . . and asset backed. Today, with the reserve currency almost totally backed by government debt instead of private sector assets, the entire financial system is in trouble when, as now, commercial member banks are depositing money in other, more profitable ways at the Federal Reserve, and the Federal Reserve is creating money or not creating it in the proper way. Of course, this would all be moot if Congress adopted the Economic Democracy Act, but you can’t expect them to stop doing what has been so profitable for themselves and kept them in power.
• Federal Reserve’s Fun with Numbers. The Federal Reserve has announced (by a slim margin) that it is done with raising interest rates . . .for now. That could mean that they’ve finally realized the futility of trying to use contradictory and self-defeating Keynesian solutions to solve economic problems . . . but it doesn’t. All it means is that after nearly a century of trying to force Keynesianism to work, it still isn’t working. Why? Because it can’t work. The only solution is to adopt the Economic Democracy Act, which no one seems willing to do.
• The Death of the Entire Financial System. According to economist Lynette Zang, the U.S. Dollar’s shaky position as the leading reserve currency is endangering the global financial system . . .yet no one is willing to do a thing about it except try and figure out ways to jump ship as fast as possible. It would, in fact, be a very simple thing to restore the U.S. Dollar’s status, although not easy. It’s not easy because a number of people’s wealth and power is tied to the current insane system and they don’t see that everyone, including themselves, would be better off under a new system. It’s simple because all that’s necessary is to adopt the Economic Democracy Act.
• England Expects Every Man to Pay More Interest. According to this here in the Telegraph (not the daily racing form, but it might as well be), the only way to save Britain (bow) is to raise interest rates to halt inflation . . . or adopt the Economic Democracy Act, restore the pound to its former glory, and return power to the people Naw, let’s just go with raising interest rates and screwing up the economy even more and giving the rich and the politicians even more power.
September 2023
• It’s Not Real Debt! While the national debt has reached $33 trillion, there’s nothing to worry about, at least according to economist Paul Krugman. It’s not like “real” debt that real people owe to other real people. No, because according to Keynesian collectivist thinking, the national debt is money we owe ourselves, so it doesn’t mean anything! Interestingly, Dr. Harold Moulton covered this exact same theory in a pamphlet he published in 1943, The New Philosophy of Public Debt. It is completely irrational and contradictory . . . in other words, the perfect Keynesian situation. Creating money in the belief that you are creating wealth is what Richard Feynman characterized as “Cargo Cult Science.” That is, create the illusion or facsimile of wealth and a healthy economy, you create the actual wealth: the magical law of similarity. Of course, if you to create a real healthy economy, you need to adopt the Economic Democracy Act.
• And What Will They Do with Their Time? According to Jamie Dimon, the workers of the future will only work three and a half days a week. What the rate of pay for this will be, the purpose of the work, and whether the laborer will be worthy of his pay does not appear to be an issue, nor what the typical worker is supposed to do for the other three and a half days of the week. And what will these workers be doing at work? Is there any reason for human input at all? Frankly, many jobs now could be done by machines or much cheaper if people didn’t need a job for income. That is why Louis Kelso said if the machine wants our job, let’s buy the machine so that we, not a faceless corporation, own the machines . . . through the corporation that acquires a face — ours! That is the idea behind the Economic Democracy Act.
• Beware of Stocks and Bonds! According to Bill Gross, investors (the current term for speculators and gamblers) should avoid bonds and overvalued stocks . . . which means pretty much everything on Wall Street, since it’s all overvalued going by traditional methods of valuation. What’s the alternative? Investing for income instead of changes in value in the underlying asset. That is the idea behind the Economic Democracy Act.
• It’s All How You Define “Strong Economy”. The experts are saying that the economy is strong, but it could go into a tailspin at any time. Uh, huh. It all depends on how you define “strong economy.” If it means that mega-amounts of money are being created and poured into the stock market instead of being invested in the private sector primary economy to provide production and consumption instead of gambling and speculation. For the record, a high stock market is indicative of a high stock market — nothing more. The fact remains that simply because there is a lot of money floating around it does not mean a strong economy . . . just ask the victims of hyperinflation. How to get away from all this fantasy? Adopt the Economic Democracy Act.
• A Short Recession? For Whom? The experts are (still) predicting a recession is coming, but are hedging by saying it may be a short one. Short? For whom? Given that the experts keep insisting that a high stock market means economic growth, and the reality that a high stock market only means that tons of money are being poured into the market instead of into real investment or consumption, the “recession” will be short for the people with enormous amounts of money and piles of stocks and bonds, and everlasting for the rest of us who live in the real world. The only way to get away from this is to adopt the Economic Democracy Act.
• The Danger of High Interest Rates! According to the experts, high interest rates (which the experts want to come down) will drag down the housing market and thus drag the economy into a recession. Of course, since low interest rates will allow the experts and their friends to borrow lots of money and pour it into the stock market and make tons of money, demanding lower interest rates for any reason could be self-serving. One way to get away from this sort of thing is to put the economy on a sound basis by adopting the Economic Democracy Act.
• Rates Will Remain High — Maybe. After getting a peek at the minutes of the latest Federal Reserve board meeting, experts are predicting that interest rates will remain high . . . unless they come down, of course (see below). Again, to get away from all the damage and uncertainty caused by artificial manipulation of the economy, we should adopt the Economic Democracy Act.
• No Inflation if You Don’t Buy Anything! According to the Keynesian economic guru Paul Krugman, there is no inflation if you exclude most of what people buy from the calculation! After all, as Keynes said, rises in the price level before reaching full employment are not inflation but are due to other factors! Pure genius! Of course, Keynes declared that you can change reality by “re-editing the dictionary” and having the government enforce it, so if the government re-defines inflation, we have nothing to worry about. Unless, of course, you prefer the economics of reality, in which case we need to adopt the Economic Democracy Act.
• No, It Depends on Asset-Backing and Elasticity. Another investment guru, Jeffrey Gundlach, has declared that the way for the United States to maintain the U.S. dollar’s reserve currency status is to cut government spending. Any decent accountant can tell you that merely cutting spending is a clear sign that a business — or a country — is on the skids. Frankly, neither a business nor a country should ever be spending anything that isn’t absolutely necessary in the first place. To cut spending, then, is a sign of defeat and a clear white flag of surrender. The real answer to money troubles is not to cut spending, but to increase revenue — and that means increasing production and that in turn means putting the monetary system in order. A reserve currency needs to be asset-backed and elastic, and that is what the Economic Democracy Act. proposes, along with expanded capital ownership to make everyone productive and revenue generating.
• The Private Sector Doing the Fed’s Work. According to Federal Reserve Chairman Powell, the fluctuations in the bond market as it responds to manipulations in the interest rates by the Federal Reserve is doing the central bank’s job for it by tightening the money supply. That is, by having bonds giving greater yields, people are putting their money into bonds rather than investing in equities . . . which suggests Powell has very little notion of corporate finance. Whether people are putting their money into existing debt or existing equity, it makes no difference to the primary economy because the companies don’t see any of that money. Conditions in the real economy remain the same, and the only question is which hand the Federal Reserve is using to strangle the private sector to favor speculators and politicians. Of course, this would all be a moot point if the country were to adopt the Economic Democracy Act, but nobody seems to be considering that for some reason.
• We’re All Rich! According to the Federal Reserve consumer finance survey, the average American household had a net worth of $1.06 million in 2022. That’s right, we’re all millionaires!! . . . except for one thing. Back in the old days they spoke of being “land poor.” That meant people had a lot of land, considered by many to be the only real form of wealth, but that it didn’t generate any cash income. Similarly, a lot of what the average American household owns is “stuff,” that is, consumer goods, not income-generating wealth. That means the average American may be rich on paper but doesn’t have the income commensurate with what appears to be a sizable accumulation of wealth. What’s the way to reverse this rather bizarre trend? Adopt the Economic Democracy Act.
• Fed Out of Control. According to this news story, the Federal Reserve has adequately demonstrated that it is inadequate. Evidently, no matter what the Federal Reserve does, it never seems to have the anticipated result. With anyone else, that would suggest that maybe they’re doing something wrong or at least not right. Nope. For them, it means do more of the same until they force it to work. Of course, they could always push for the Economic Democracy Act . . . but what would be the fun of having a well-run economy that makes sense?
• A Triple Threat. According to Ned Davis Research, there are three threats to the economy. 1) High inflation, 2) high interest rates, and 3) credit risks are increasing. What’s interesting about these three threats is that they are all pretty much the same thing. Inflation is a rise in the price level, interest is construed (incorrectly) as the “price” of money, and credit risk is reflected in a high interest rate. Is there a way around it? Yes — credit risk is greatly diminished by shifting creditworthiness from the borrower to the investment which is what the Economic Democracy Act does, at least in part.
November 2023
• The Economy is Booming . . .Again. Despite what you might think from your personal situation and the fact that your financial and economic position, in common with most people, is deteriorating rapidly, you are clearly delusional, because the economy grew in the fourth quarter! . . .for whom, we’re not entirely certain. This “blockbuster growth” is fueling . . . something we’re not entirely clear about, but, what the heck, it’s growth and that’s all that matters . . . right? Well . . . no. What matters in social justice is that every actual person has the opportunity and access to the means to participate fully in economic (and other) life, not that the “average” does. A millionaire and I together have an average of a million dollars . . . which tells you how much I have. What both I and the millionaire need, however, is the Economic Democracy Act to equalize opportunity and access to the means without harming either of us and benefit both.
• Don’t Worry, Be Happy. According to the experts, Americans don’t have to worry about high interest rates. Well . . . that depends on what you mean by “worry.” They were correct that the Federal Reserve didn’t raise interest rates . . . but everyone should be worrying about the fact that the Federal Reserve fools around with interest rates in the first place. The Federal Reserve should not be trying to control the economy but should be concerned with providing adequate liquidity and a stable currency for the private sector. That’s about it, plus some administrative functions, such as overseeing clearinghouse operations. To restrict the Federal Reserve to its proper functions, we need the Economic Democracy Act.
• Pity the Rich. According to a hedge fund operator, President Biden made the economy much worse than otherwise. Of course, he doesn’t explain how anybody else is doing or would do any better. The fact is, all the experts, and thus all the politicians, are operating from the wrong paradigm and using the wrong assumptions. They all think, for example, along with Keynes, that if you control money and credit, you control the economy. No, the fact of the matter is, if things were allowed to operate naturally, as in the Economic Democracy Act, the economy would itself control money and credit. Since the experts’ entire frame of reference is backwards, it’s plain to see why they think that having trillions of dollars in unrepayable debt is such a good thing, and that ordinary people having productive capacity is so bad.
• Consumer Debt Crisis. The current millennial challenge of struggling with credit card debt hardly qualifies as a new news item, as it has been an ongoing problem since the closing of the nineteenth century. The credit union movement started at that time because many wage earners had trouble connecting income and expenditures as well as meeting sudden emergency expenditures. After World War II, consumer credit changed from an emergency measure to a usual thing — which saved Keynesian economics by artificially generating consumer demand to keep the economy running to make up for withdrawing demand by urging “saving” to provide investment capital. All of this could be resolved by adopting the Economic Democracy Act which — among other things — would increase consumer income and balance supply and demand by restoring Say’s Law of Markets.
• The Weak Dollar and Economic Growth. Ignore the fact that we keep getting told at one and the same time the economy is booming, and the economy is weak. According to Reuters, the U.S. economy is weak, explaining why the U.S. Dollar is weak. Of course, if you view currency as a means of measuring value instead of controlling the economy, this is like saying the inch has gotten shorter, or the mile isn’t as long as it was yesterday. Adopting the Economic Democracy Act and returning money to its original purpose as a stable medium of exchange would do a great deal to correct this problem, but none of the powers-that-be seem to be considering it.
• Death of Russ Robinson. We were saddened this week to learn of the death of Russ Robinson, who was working with the CESJ core group on possible financing for a new type of city in Utah. Russ came to CESJ through the late Kemp Harshman and was very enthusiastic about applying the Just Third Way financing concepts to create a model for future financing in ways that benefit every child, woman, and man.
• Goldman Sachs Says Nothing to Worry About. Seconding Paul Krugman, whether they mean to or not, the investment firm of Goldman Sachs has declared the worst is over . . . for them. Whether they realize it or not, their economic view is as collectivist as that of Krugman, with a very distorted view of money and credit, as well as confusing truly productive activity that provides food, clothing, and shelter for genuine people, with playing with pieces of paper that, more and more, represent nothing but a mountain of debt the world’s governments have issued. One might think, to hear them, that the world was created exclusively for government and Wall Street, which we suspect is not the case. One way to restore the economy so that it operates for the benefit of ordinary people is the Economic Democracy Act, which would return money to its original purpose of a stable medium of exchange and focus on getting people what they need to live on rather than on generating meaningless pieces of paper and electronic impulses.
• Money Isn’t Wealth. Sometimes the obvious isn’t so obvious. Robert Kiyosaki has pointed out the rather obvious fact that money isn’t real wealth — it is a measure of real wealth, and a means of storing a claim on real wealth . . . which doesn’t mean all that much in the Keynesian universe when government manipulates the value of money on a daily, sometimes hourly basis. As Kiyosaki explains, the rich put their “money” in non-monetary wealth, i.e., into things that hold their value or generate marketable goods and services. One way that everyone can do this the way the rich do, is to adopt the Economic Democracy Act.
• Biggest Credit Bubble in History. According to Mark Spitznagel, chief investment officer of Universa Investments, the United States (and thus the world) is heading for the greatest financial crisis in history, a “mega market crash” because of the Federal Reserve’s monetary policy, and he doesn’t see any solution except for the Federal Reserve (meaning the Federal Reserve at the behest of Congress) to stop doing what it’s doing . . . but only in part. That, of course, only kicks the can down the road. To solve the problem, it is essential to adopt the Economic Democracy Act, and institute sound monetary and tax policy, not just do the wrong thing less intensively.
• That’s the Theory, Anyway. In theory, the Federal Reserve is independent of government, and is owned by the member banks. Bologna. The Federal Reserve is controlled by the U.S. government, specifically the president, who has the power to appoint the Chairman (and Vice Chairman), which is then approved by the Senate. If the Chairman of the Federal Reserve doesn’t deliver the goods, he or she is replaced. Since Keynesian economics ensures that the goods will not be delivered in any way that benefits ordinary people at the expense of the power elite, nothing will ever change . . . because if policies don’t work (and they can’t), the Federal Reserve can blame the government, and the government can blame the Federal Reserve . . . and you know who gets caught in the middle. The only solution is to make the Federal Reserve truly independent of government, and restrict it to a completely reactive, not proactive role. Frankly, the only policy the Federal Reserve should have, monetary or otherwise, is to rediscount qualified industrial, commercial, and agricultural paper, and engage in open market operations to ensure an adequate supply of money and credit. That’s it. This is the gist of the central bank’s role in the Economic Democracy Act.
• Avoid Recession Without Inflation! The experts are going to save us! . . . again! “Austan Goolsbee, president of the Federal Reserve Bank of Chicago, suggested Monday that the economy appears to be on what he calls the “golden path,” another term for what economists call a “soft landing,” in which the Fed would curb inflation without causing a deep recession.” Not in the Keynesian universe, you can’t. It is an iron rule that economic growth is fueled by inflation . . . which doesn’t explain why from 1878 to 1893 the United States experienced the greatest economic growth in history and prices were falling. The simple fact is that the only way to have economic growth and avoid “recessions” (the word used to avoid “depression” because depression is bad for you if you’re a politician trying to get reelected) is to ditch Keynesian economics and adopt the Economic Democracy Act which — among other things — would link money and credit creation directly to the present value of existing and future wealth.
December 2023
• Gross Domestic Income is Falling Behind. U.S. economic growth may have tipped the scales at 5.2%, but Gross Domestic Income is tottering along and has fallen 0.16% . . . meaning somebody else is getting richer at everyone else’s expense, as the above item notes. What is the answer? Adopt the Economic Democracy Act, which would restore Say’s Law of Markets so that everyone could be productive and people who produce would also generate income in equal amounts.
• Monetary Heroin. According to Jamie Dimon, head of JP Morgan, “the world [is] now facing a ‘dangerous cocktail’ of risks that could prove “explosive” for the global economy. “[T]he trillions of dollars in stimulus cheques handed to Americans during lockdown and $4 trillion printed by the US Federal Reserve to buy bonds . . . is like heroin.” There is, of course, a relatively simple way out of this conundrum, although it might not be easy to persuade the powers that be of its benefits: adopt the Economic Democracy Act which — among other things — would link money and credit creation directly to the present value of existing and future wealth, and not simply create money to spend that is not backed by anything of direct value.
• “Hard Landing” Coming. According to Bill Ackman, founder of hedge fund Pershing Square, the U.S. economy is facing a “hard landing” unless the Federal Reserve cuts interest rates. Translation: he wants cheap money to play with. Of course this would be moot if Congress would adopt the Economic Democracy Act, which would return economic life to reality and stop all the Keynesian games being played.
• “Soft Landing” Coming. According to Janet Yellen, past Chairman of the Federal Reserve and current Secretary of the Treasury, the U.S. economy is facing a “soft landing” so long as the Federal Reserve continues its present policies. Of course this would be moot if Congress would adopt the Economic Democracy Act, which would return economic life to reality and stop all the Keynesian games being played.
• Yes, But the Prices are Still High. According to the Federal Reserve, inflation has hit the lowest level since the halcyon days of 2021 . . . when inflation was still eating away what little purchasing power ordinary people had. Furthermore, just because inflation is slowing down doesn’t mean that ordinary people have somehow benefited. Prices are still too high and income is still too low. What can be done? Adopt the Economic Democracy Act, and the rich would lose nothing except their monopoly over future wealth and they can keep what they already have.
• Japan’s Economy Shrinking at Slower Pace. Evidently Japan is going down the tubes at a slower rate than expected due to some private sector capital investment. Unfortunately, a shrinking economy is not a good place to invest your past or future savings, as the demand for capital is derived from consumer demand, as Harold Moulton demonstrated in his 1935 classic The Formation of Capital. If Japan wants to get out of the economic doldrums, their powers-that-be should encourage people to spend existing savings on consumption and finance new capital formation with future savings to meet the new demand. Otherwise, they’re just wasting money. This is one of the features of the Economic Democracy Act.
• “Silent Recession”? According to the experts, we’re in a “silent recession,” meaning the economy is doing great, but actual people think times are hard. Translation: the rich are doing great as their wealth is piling up at an increasing rate, while ordinary people are getting poorer at an accelerating rate. All this could be corrected if the U.S. would adopt the Economic Democracy Act, which would restore Say’s Law of Markets so that everyone could be productive and people who produce would also generate income in equal amounts and everyone participate in prosperity.
• Yellen Says “Nanner, Nanner, Boo, Boo” to Economists. Janet Yellen is crowing in victory after the manipulated statistics about employment were released and they didn’t show high unemployment after being adjusted. Of course, other economists were saying there is nothing to worry about. Since nobody knows what’s going on anyway, why don’t they adopt the Economic Democracy Act which would allow people to figure out what is going on economically without any hocus pocus?
• “Robert Kiyosaki Say’s Dollar is Trash. According to Robert Kiyosaki, who has made himself popular by telling people what they don’t want to hear, at least if you’re a politician or Wall Street gambler, printing money causes problems and doesn’t solve them. Naturally, everyone is hurrying to say how wrong he is, but that isn’t going to change the facts. Frankly, the only thing that’s going to work is to adopt the Economic Democracy Act, which would return economic life to reality and stop all the Keynesian games being played.
• “Inflation” Cools, Prices Stay High. Don’t try to figure out reality from what the so-called experts are saying. It can’t be done. For example, “cooling inflation” doesn’t mean prices will come down, it only means they won’t go up as fast. A few prices fall, just before going up again, but so long as we’re stuck in the Keynesian paradise, we aren’t going anywhere except down the tubes with monetary insanity. And yet, and at the same time, the experts are saying that interest rate cuts could lead to more inflation . . . lowering prices means higher inflation? We always thought inflation had something to do with higher prices . . . frankly, the only real solution to today’s economic mess is the Economic Democracy Act.
• Academic Moral Bankruptcy. More evidence that Academia is even more isolated from reality than Keynesian economists has surfaced in comments by the heads of America’s leading universities calling for Jewish genocide à la the Third Reich. No, Academics, you aren’t gods, and at the rate you’re going, you’re not angels or saints, either. Frankly, real people need to take back Academia, and that is only going to happen when we get the Economic Democracy Act.
• Education for Slavery. As far as Robert Kiyosaki is concerned, today’s young people are not being educated, they’re being trained . . . to be good wage slaves and management serfs. Genuine education that will bring about entrepreneurship, innovation, progress (as opposed to progressiveness) is being completely ignored . . . something which Robert Maynard Hutchins noted nearly a century ago, and which has only gotten worse since. The problem, as Hutchins saw it, is that education has become obsessed with money and job training, when neither should be of primary or even secondary concern in education, but focused on giving people what they need to lead a good life. That will never happen so long as Academia depends on outside sources for money, whether government or the private sector. If we had the Economic Democracy Act, however, the problem could very well solve itself, with students, faculty, and administration all having independent incomes so they can focus exclusively on real education.
• “Only One Type of Inflation Left”? One of the problems about living in Keynesian Lalaland is that words mean what you want them to mean if you have enough power to force others to accept your definition. This is a fundamental principle of Keynes, who believed the State has the right and the power to “re-edit the dictionary” and thereby change reality. Thus, when the experts inform us there is only one type of inflation left, it doesn’t really mean there is little or no inflation, it merely means that they have defined the others out of existence. If they really wanted to get in touch with reality, they would push to adopt the Economic Democracy Act.
• Federal Reserve Declares Interest Rates May Have Peaked. In the latest noise coming from the Federal Reserve, the mystical monetary gurus of the central bank have declared that interest rates may have peaked . . . as if they didn’t have complete control over them. Translated into English, such a declaration means they’ve run out of ideas and have no idea what they’re doing. Of course, if they wanted to act rationally, they would push to adopt the Economic Democracy Act, and let the market determine interest rates.
• Pandemic Economic Impact. Strange as it may seem to people living in the real world, the experts have realized that the economic impact of the pandemic is lasting longer than they thought it would. Evidently you can’t shake up the world’s economy and expect to see everything back to what they think is normal within a very short period of time. Of course, normal is a somewhat relative term. If they wanted to put the global economy on a footing that would be more human rather than popular, they should work is to adopt the Economic Democracy Act, which would return economic life to reality and stop all the Keynesian games being played.
• Greater Reset “Book Trailers”. We have produced two ninety-second “Book Trailers” for distribution (by whoever wants to distribute them), essentially minute and a half commercials for The Greater Reset. There are two versions of the videos, one for “general audiences” and the other for “Catholic audiences”. Take your pick.
• The Greater Reset. CESJ’s new book by members of CESJ’s core group, The Greater Reset: Reclaiming Personal Sovereignty Under Natural Law is, of course, available from the publisher, TAN Books, an imprint of Saint Benedict Press, and has already gotten a top review on that website. It can also be obtained from Barnes and Noble, as well as Amazon, or by special order from your local “bricks and mortar” bookstore. The Greater Reset is the only book of which we’re aware on “the Great Reset” that presents an alternative instead of simply warning of the dangers inherent in a proposal that is contrary to natural law. It describes reality, rather than a Keynesian fantasy world. Please note that The Greater Reset is NOT a CESJ publication as such, and enquiries about quantity discounts and wholesale orders for resale must be sent to the publisher, Saint Benedict Press, NOT to CESJ.
• Economic Personalism Landing Page. A landing page for CESJ’s latest publication, Economic Personalism: Property, Power and Justice for Every Person, has been created and can be accessed by clicking on this link. Everyone is encouraged to visit the page and send the link out to their networks.
• Economic Personalism. When you purchase a copy of Economic Personalism: Property, Power and Justice for Every Person, be sure you post a review after you’ve read it. It is available on both Amazon and Barnes and Noble at the cover price of $10 per copy. You can also download the free copy in .pdf available from the CESJ website. If you’d like to order in bulk (i.e., ten or more copies) at the wholesale price, send an email to publications@cesj.org for details. CESJ members get a $2 rebate per copy on submission of proof of purchase. Wholesale case lots of 52 copies are available at $350, plus shipping (whole case lots ONLY). Prices are in U.S. dollars.
• Sensus Fidelium Videos, Update. CESJ’s series of videos for Sensus Fidelium are doing very well, with over 155,000 total views. The latest Sensus Fidelium video is “The Five Levers of Change.” The video is part of the series on the book, Economic Personalism. The latest completed series on “the Great Reset” can be found on the “Playlist” for the series. The previous series of sixteen videos on socialism is available by clicking on the link: “Socialism, Modernism, and the New Age,” along with some book reviews and other selected topics. For “interfaith” presentations to a Catholic audience they’ve proved to be popular, edging up to 150,000 views to date. They aren’t really “Just Third Way videos,” but they do incorporate a Just Third Way perspective. You can access the playlist for the entire series. The point of the videos is to explain how socialism and socialist assumptions got such a stranglehold on the understanding of the role of the State and thus the interpretation of Catholic social teaching, and even the way non-Catholics and even non-Christians understand the roles of Church, State, and Family, and the human persons place in society.
Those are the happenings for this week, at least those that we know about. If you have an accomplishment that you think should be listed, send us a note about it at mgreaney [at] cesj [dot] org, and well see that it gets into the next “issue.” Due to imprudent and intemperate language on the part of some commentators, we removed temptation and disabled comments.
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